The European Securities and Markets Authority (ESMA) has made a public statement to remind UK firms to adequately prepare for a ‘no deal’ or ‘hard Brexit’ scenario on 30 March next year.
As Brexit negotiations continue without an agreement over a transition period, the European regulator has stepped in to raise awareness among UK market participants of the timeline to submit requests for authorisation to National Competent Authorities (NCAs) and itself for regulated entities planning to relocate outside of the UK.
ESMA states that firms have until the 30 March 2019 deadline to have a fully authorised legal entity located within the 27 European Union member states in order to continue providing financial services within the Bloc.
“ESMA has seen an increase in the number of authorisation requests submitted to EU27 authorities. Against this background, ESMA urges entities wishing to relocate to the EU27 to submit their application for authorisation as soon as possible to allow it to be processed before 29 March 2019,” said the statement.
“Some NCAs have already been clear to entities that, unless an application is received in the month of June/July, there is no guarantee that authorisation will be achievable before 29 March 2019.”
A host of firms across the buy- and sell-sides have already confirmed plans to relocate to mainland Europe, with Frankfurt and Amsterdam currently the most desired locations.
Trading venues such as Cboe Global Markets and TradeWeb have confirmed plans to move operations to Amsterdam, while a number of banks have already begun moving staff from London to Paris and Frankfurt bases in preparation for the UK’s departure from the EU.